AED to Drill Second Puffin Development Well

AED Oil Limited reports that the Stena Clyde is on its way from Northern Territory waters to the Puffin oilfield in production license AC/L6, with an estimated date of arrival around February 15th. It is expected that the Puffin-8 well will spud around February 16th.

Puffin-8 is the second development well targeting the main Puffin Northeast structure (NEI). The subsea location of the well is 310 meters south of Puffin-7. The well is again planned as a horizontal well, reaching the reservoir (top LK1a sand) approximately 2045m RT. The horizontal section would be a minimum of approximately 250 meters. AED may elect to extend the well by approximately 400 meters in the event reservoir conditions vary from current understanding and to gather valuable information. Furthermore, as a secondary target, consideration is being given to extend the horizontal section approximately by an additional 500 meters and to explore the neighboring NE3 structure. The well is expected to reach a minimum measured depth of at least 2920 meters RT, with a maximum of around 3800 meters RT. After completing the well, a short flow test is estimated to be 42 days, assuming no downtime for weather or other reasons, with an estimated completion date of March 29th.

Operations will then shift to the next project phase, involving subsea installation of flowlines, umbilicals and the subsea manifold in preparation for the production of first oil. This next phase is due to commence in the first half of April. On the assumption of continued good progress, the first oil date remains as June 2007.

AED Oil has a 100% stake in AC/L6 (license) and AC/P22 (permit) which is in the Ashmore Cartier Exploration Permit area of the Vulcan Sub-Basin, located in the Bonaparte Basin in North Western Australia within uncontested Australian territorial waters.

The license and permit areas are located approximately 80 kilometers southwest of the commercial Jabiru and Challis oil fields and approximately 25 kilometers from the Skua oil field. Initially, AED Oil intends to develop the proved reserves in the Puffin field (comprising the accumulations discovered by the Puffin-2 and Puffin-5 wells) and explore Puffin-9, which is located two kilometers from Puffin-2.

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